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Mad Money

News/Business. (2012)

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01:00:00

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480

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Abbott 23, Cramer 14, Jim 8, Us 6, Henry Schein 6, Pennsylvania 5, Starbucks 4, Europe 4, Sour Apple 3, Ab 3, Phillips 3, United States 3, Austin 3, U.s. 2, Apple 2, China 2, New York 2, Washington 2, Popeye 's 2, Randy 2,
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  CNBC    Mad Money    News/Business.  (2012)  

    November 8, 2012
    11:00 - 12:00am EST  

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i'm jim cramer. welcome to my world. >> you need to get in the game! >> firms are going to go out of business and he's nuts! they're nuts! they know nothing! >> i always like to say there is a bull market somewhere. "mad money," you can't afford to miss it. hey, i'm cramer. welcome to "mad money." welcome to cramerica. some people want to make friends, i'm just trying to save you some money. my job is not just to entertain but educate. so call me at 800-743-cnbc. it's like someone flipped a switch and everything that was good is now bad! everything that was going well seems now to be going poorly. everything that has been terrible has now turned even worse. that's the best way to describe this down turn that continued
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today with the dow sinking 121 points. s&p 500 declining 1.2%. nasdaq, giving it up, tumbling 1.42%. look, i come out here every night. i do try to be as optimistic as possible. i do. historically that is a pretty darn good philosophy for me considering that i made my first stock buy at 880 on the dow jones industrial average 34 years ago and some 12,000 points ago. but moments like these forced me to encourage to stay with stocks when the mood turned really nasty. maybe too sour and the prices seem too high versus the news backdrop, so now stocks are in -- >> the house of pain. >> free fall. that's what they were in the last half hour today and all day yesterday. let me tell you what i would have done right now. if i were back at my old hedge fund trying to figure out the psychology of the market. a lot of what is happening is very rooted in psychology. i would take out -- my dad taught me to do this.
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just take out the legal pad, right. and you just do right here, you do all right, the pros and the cons that have now gripped the market. so to start, the most overwhelming con for the moment is the issue of the fiscal cliff. hence, rise above, because i favor your stock portfolio going higher, not lower. the fiscal cliff is what will happen at year end if the government does nothing to compromise. tax rates goes up, spending goes down. so what's my pro response? first, it's not like this was some great unknown that just got surfaced. fiscal cliff has been out there for a year. the only reason it's more front and center now is that, well, gee, governor romney lost. as long as his candidacy was alive, a chance for a deal was alive because a new cast of characters in washington would be coming in. typically a republican in the white house that gives you the hope of anything drastic could be reached. now we're back to the same
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antagonists who couldn't agree last time. so i have another comeback. my pro. simple. why shouldn't we think something can be worked out and the politicians can rise above this partisan warfare? the intransigence of the republicans arguably cost them the white house. and a bunch of what should have been certain senate seats. something that should have been a given, given the lousy unemployment numbers. they have to realize it's electoral suicide to stick by the promise to never raise taxes for the ultra rich. if they do so, they run the risk of being voted out of congress. that's the take away of tuesday night. it's a pretty powerful incentive that could bring about a resolution that doesn't dramatically raise taxes on stocks. and that might tip people back into the market. as they realize that rising dividends from cash rich companies are far more bountiful than any return that bonds can possibly give you. the next con, it is a serious one and it's one that i identify with and believe in and that's
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the earnings. for the most part, these earnings they have been really disappointing. they have been dogs and they're making you cry. funny thing about stocks, eventually they do go to levels where the bad news is priced in. and it becomes possible that expectations have gotten too low and that's the process we're doing right now. we're not there yet. we're still in the not eventually phase. take starbucks. not that long ago the stock stood in the low 50s. it was quite negative. they plummeted to the low 40s. last week they reported again. it handily beat the downbeat expectations and then raised results and in a terrible market they rallied back to where it was before it initially disappointed. i think the stock can go much higher than that. the lesson, expectations reduced now can lead to expectations beat next quarter.
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we're simply re-adjusting the entire market downward. the way starbucks got re-adjusted from $52, $53, $44, $43. it is happening with the whole market. it's not a reason to panic. it could be a reason to trim your positions as i suggested yesterday at the top of the show. but not sell wholesale. not sell too low precisely because of that starbucks rebound factor got to a level where it was right to buy, not sell. this can be a tricky process. if you use the starbucks prism, you have to expect pain before you get gain. that's what's happening right now. this is where you live until you get to here. it is happening in whole foods now. that is getting hammered. once the stock re-adjusts lower as the uber growth bulls throw in the towel, i think can you have a starbucks-like resurrection. it's not that easy to find the next starbucks. you always have to fret. you have to worry that you might
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be stumbling into a mcdonald's, a once consistent grower that is now become maddeningly inconsistent as today's miserable same-store sales numbers show. because of a rising tax on dividends courtesy of the coming fiscal cliff, the 3% yield no longer protects from you the down side. you have to pay higher taxes on your dividends. sure, there are some companies that blew away numbers. last night qualcomm cell phone semiconductor had a magnificent quarter. time warner did the same. but for every qualcomm and time warner, there are ten others that are terrible. it's great to have a handful of stocks that are working. it would be better if it weren't just a handful. europe is bad. we heard that. but europe has been bad for ages. again, no revelation. okay, maybe it had to step down. nevertheless, i'm going to counter the total european negativity with the potential for a turn in china with new administration and ample stimulus. the possibility that europe is bad and getting worse can be
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balanced, maybe even checkmated by a china that is okay in getting better. how about the tenor of business? a huge part of our country is devastated by a terrible hurricane which led us to believe there could be a positive rebuilding effort of monumental significance once the checks start flowing in. then that got re-evaluated negatively as something so severe that it hurt numbers and caused big losses for companies across the northeast because they haven't been able to rebuild. that can change once gasoline starts flowing again and people have power for a couple days, rebuilding can begin. not yet. that initial positive that turned negative ultimately might turn positive again. that's the pro to the con. unfortunately, we have to slice numbers. the estimates are too high because of the storm for many companies including retailers across the board. and that means many retail stocks have to go down before they can rally. be very careful of retail stocks. i will be tempted to buy puts on
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the rth, the retail etf. just to protect myself from the potential carnage. carnage that will be abetted by disappointing news that i did not expect from nordstroms tonight. finally there is selling in oils and banks among others. governor romney lost and he was the champion of both groups. this could soon be running the course. the oil stocks are hammered in part because the crude futures came down since sandy caused a bill oil backup. you heard about that every night on the news. now gasoline is starting to flow again. i think crude can come back. you need to pick at the oils as i'm doing with my charitable trust. as for the banks, come on, they were not going to do that much better under romney anyway. bankers belly ache over dodd/frank. but they're getting good numbers and banks do nothing but belly ache anyway. i think they're getting oversold. overall, i look at most stocks like this. for the moment they are too high. but the process of wrenching expectations down is under way now. and so therefore is the correction. and ultimately, the capitulation.
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when we can beat the new lower expectations starbucks-style and bridge the fiscal cliff, i'm confident that we can come back strong. so here's my bottom line. we have cons galore. but there are some pros out there, too. unfortunately, it's sequential just like the cart before the horse. push the cons down before the pros bring it up. only then can we return to a more hospitable market. let's go to austin in maryland to start. austin? >> how you doing? >> okay, austin, how about you? >> not too bad. i've never done stocks before. i want to look into getting into what you thought about getting into wal-mart stock. i know they have the early black friday coming out. >> no. no. stephanie link, co-director of my charitable trust and i both talked about wal-mart today. we agreed that this stock could go down, maybe even as much as five to eight points before it
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is no longer expensive. let's go to josh in my old home state of pennsylvania. josh? >> hey how you doing tonight there cramer? >> i'm hanging in. >> a red hill boo-yah. >> thank you. >> my question tonight is a stock that released earnings yesterday is activision with three great games, i just don't understand what happened today. you know, during the day. >> all right. this is a bad group. this is a bad group. everybody wants to own electronics. this is a bad group. what i mean when i say it's a bad group is you get good news and they don't move and when you get bad news, they plummet. it's a bad group. i don't want you in it. get rid of the bad so the good can once again overpower. fiscal cliff fears, disappointing earnings, europe, negative tenor of business, selloff of oil and banks. look, got to go lower before we can come back strong.
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"mad money" will be right back. >> coming up, for the best? abbott labs has pulled back from the highs after disappointing earnings and problems in its pipeline left investors sick of the stock. but as it approaches its planned breakup, is it time to reunite with this health care name? stick around, cramer's got a prognosis. >> and later, hot and fresh? wall street ordered up shares of popeyes owner today after earnings topped expectations. but is the stock as appetizing as it looks? cramer finds out when he speaks to the ceo exclusively after earnings. plus, sour apple? it's most valuable tech company in the world. and its products have changed the course of consumer electronics. so why is the stock taking a dive? and is now the time to get in? cramer has answers. don't miss his take on apple coming right up. all coming up on "mad money."
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at a moment where everyone is freaking out about the countdown to the fiscal cliff at the end of the year, and freaking out frankly with good reason, let's not forget there is plenty of worth while opportunities out there. it is harder to find them. we need to focus on stocks that are immunized against the fiscal cliff, stocks that work even if the united states manages to slip back into a recession and stocks that have a secular growth fee. and that's why tonight in an effort to be constructive, not destructive, negative or pessimistic, i want to talk about a company that actually has a lot to look forward to in the next couple of months, a pair of major catalysts that should send the share price soaring higher. the company, abbott labs. i like it so much i've been
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buying it for my charitable trust. now i've liked abbott for some time. you heard me say it a few times. it's one of our breakup plays. breaking up is easy to do. it's a company that is unlocking value for shareholders by splitting itself up into two different businesses easily understood and appreciated by wall street. abbott announced the breakup in october of last year. i recommended it in november. since then the stock has given you about a 21% return and include reinvested dividends. as we approach the end of the year, i think abbott labs has more room to run, especially since the stock recently pulled back and pulled back in a major way. it's down eight points from its highs. i can't believe we're getting this. we traded in and out of abbott for the charitable trust a number of times. this is the latest reason why actionalertsplus.com decided it is time. however, there are two more reasons why i think abbott labs
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is worth owning here. while you trim the portfolio to cut back on stocks with too much exposure to the fiscal cliff which is something i wouldn't be wearing this button if i didn't think it would wreck a lot of portfolios, abbott is the name you should be repositioning into. in part because it's a health care company and health care is about, not totally, particularly in italy and spain, is about as recession resistant as it gets. there are a lot of big pharma stocks. what abbott has is two catalysts, one is now and one in a couple days. the first catalyst, it's the breakup. new year's eve when everybody else is in the business world counting down to the horror of the fiscal cliff, abbott will be on the verge of this corporate divorce that should create enormous value for shareholders. that's right. they set a date on january 1, the company will officially break itself up. and this is the thing we have been waiting for since i initially recommended the stock last year at this time. the whole point of the split is
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they have the fastest growing medical products business being held back by a slower growth pharmaceutical business. after the split, you're going to have two separate publicly traded companies. abbott's pharma business and that will be called ab v and then there is abbott labs. that will be a play on diagnostics, generic drugs and medical devices. why do this? the idea is that after the breakup, you can have two companies that each appeal to a different constituency of institutional or individual investor. abbott labs will have a fast growth rate but it's going to have a lower yield. it should draw the interest of more growth oriented players that are not that sensitive to a dividend. ab v gives you slower growth. but it's expected to sport a higher dividend with a bountiful 4% yield which means it should attract value investors looking for income. the notion you can create value by rearranging the furniture may sound like some kind of ridiculous shell game. but you know, we know it works. empirically.
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we see them make us money time and again. kraft and conoco, wow, those were great. i believe abbott labs will be no different. this whole exercise is about valuation. the wall street fashion show, that's how i -- you know, it's glibly referred to it, assigned to particular stocks. right now abbott labs sells for, i can not believe how low this is. i watched the stock for 30 years. 12.2 times next year's earnings. a consistent 9% growth rate. at the moment the whole company is valued like a slower growth drug company. despite the fact that abbott contains a huge faster growing medical device business that is the envy of the industry. after the breakup, the medical device company part of abbott should sell 15 times earnings. it has a high double digit growth rate. even if ab v trades at 12 times earnings, that means when you add up the sum of the parts, it should be worth $74 a share, ladies and gentlemen, talking about a $63 stock. when the breakup happens on
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january 1st, that move alone should be worth $10 or 15%. that is the first and most important catalyst. the one that attracted us initially. abbott labs has a second catalyst. the american association for the study of liver diseases meeting. that starts tomorrow. runs through november 13th. at this conference, abbott's pharmaceutical division is presenting really important results of phase two, not three, phase two clinical trial for the all oral hepatitis c drug. right now gilead is taking the lead in the race to cure help c. that's why the stock is so strong. abbott looks good. they're the only company with an oral hep c medication that is anywhere near being ready to be commercialized. the real story is the impending breakup. starting at the end of this month abbott's management is putting on a road show. some people call it a dog and pony show. where they're going to be telling people about this and promoting each post breakup company. they'll be trying to gin up some interests or in this case trying to get people not to sell stocks
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which is why i think you want to own the stock ahead of that road show. that's why this latest pullback in abbott stock is kind of lucky. they sold off for more than just the market. sold for some reasons. company reported october 17th. people thought the results were disappointing. abbott's revenue came in a bit light. to make matters worse, not long after the quarter the company announced it was no longer testing its kidney disease treatment. because of safety concerns. the stock really got clobbered on that. this doesn't bother me too much now. it's not in the stock anymore. there were always worries about the drug. the other negative, abbott's post breakup guidance was 14% below what wall street was expecting. that seems like a real blow. most of the difference is because of a higher tax rate for ab v and not anything to do with the problems of an underlying company. remember, you're getting it long after all the bad news. stock is already down because of it. after abbott split itself, which company should you own? the ab v or the abbott labs? i think both.
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i prefer the new abbott labs with the faster growth and excellent management. it's going to retain miles white as the ceo, one of the best executives in the health care business, really revered in the group. he masterminded the breakup in the first place. give your portfolio something to look forward to. buy abbott labs in anticipation of good drug pipeline news and the breakup on january 1st. management's road show where they talk about the breakup starts at the end of the month. after the split, i'm telling you i would stick with abbott labs. probably what actionalertsplus is going to do over the medical device, over ab v that slower drug company with the bigger dividend. in this breakup, abbott is giving you something for everybody, abt, the kind of stock you need in this environment. robert in new york. robert? >> boo-yah, jim. how we doing today? >> not a bad day at the office. how about you? >> i'm doing pretty good. long time listener, action alerts member. >> thank you. >> my question, so president
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obama being re-elected and the drug patent cliffs as backdrop themes, i know you're playing abbott lab and bristol-myers. >> yes, you read it from the trust, thank you. >> yep. i went after an old favorite which is down at the bottom, teva pharmaceuticals. i want your view on 2013. >> let me give you a weird good news about teva. they reported a quarter i didn't think was great and the stock didn't go down. i wanted this stock to bottom for some time. i was using one of their products the other day. they are the greatest generic. people are worried about the ms drug. i think the risk is taken out of the stock. i have to tell you, robert, i don't know about the worries. so you know i think it's inexpensive. i just don't have a catalyst. i'm sorry. let's go to john in texas. john? >> blue sky boo-yah, jim. >> i like that. i can use some blue skies. >> i know. no debt, big revenue growth. and a big new customer with
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walgreens. >> you know, we looked at greenway medical a couple years ago. i have not looked at it since which means i've got to do home work before i opine on it. it had disappointed us, to be honest. sounds like you have a new line on it and i have to do some work. i'm not current on greenway. all right. now just like when friends break up, you got to choose some sides. i say you choose abbott. after the break, i'll try to make you even more money. >> coming up, hot and fresh? wall street ordered up shares of popeyes owner today after earnings topped expectations. but is the stock as appetizing as it looks? cramer finds out when he speaks to the ceo exclusively after earnings. and later, cash infusion? from syringes to surgery, medical supply company henry shine is in the heart of health care. as this sector settles into new reforms, should you make an
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appointment to buy. today cramer is going one-on-one with the ceo to determine the diagnosis after earnings. all coming up on "mad money."
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today everybody is feeling let down by yet another disappointing same-store sales number from mcdonald's. you know what? i think we're paying a little too much attention to ronald mcdonald and not enough attention to popeye. i don't mean the good for you
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cartoon character who ate spinach, i'm talking about popeye's, the fried chicken outfit that belongs to afc enterprises. they have had a tremendous run. it is up 85% for a year. it's given you a 14% gain since we spoke to the ceo in august. i think the stock has much more upside. see, afc reported last night and this company which has been turning itself around for years reported a real good quarter. they reported a two cent earnings beat, global same-store sales increased by 6.3%. popeye's domestic numbers outpaced the category for the 18th consecutive quarter. it reiterated the turn around which includes revamping many popeye's locations is going swimmingly. they got hit today falling 3%. that doesn't mean the earnings were bad. it just means the expectations were incredibly high. as this stock has had a run of enormous proportions going into the quarter. now that stocks are pulling back, taking a breather, i think you'd be getting ready for a
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terrific entry point. let's check in with the president and ceo of afc enterprises and learn more about the quarter and her company's prospects. welcome back to "mad money." >> hey, jim. good to see you today. >> you delivered just a terrific quarter. i am going to ask you to contrast why do you think afc enterprising is growing at a high single digit rate and competitors in that business like mcdonald's are really falling right now? is it different menu? is it because of value? what is happening in this industry? >> you know, i think chicken is selling because it's flavorful and exciting and we brought a lot of new product news to the category. qsr is a share game. it's all about who has the hottest, best new products to draw guests into the restaurant. i'm not too distracted by the mcdonald's number. there is a lot of positive activity going on. >> speaking of positive activity, i was in new orleans
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last week and big line for the crawfish festival at the one on st. charles street. i wanted to know, this is such a successful promotion. you would ever think of doing what darden which is to have an olive garden and red lobster? could you do because of the starvation for seafood in this country, a second chain entirely for crawfish? for seafood? >> well, you know, we think it's a great variety play for popeye's. this is the fourth year in a row we run a crawfish festival. every year it increases in sales and popularity. so, you know, i think we're pretty satisfied that seafood is becoming a mainstay in our menu. >> now let's talk about the fact that you're still doing measured growth in that you're opening stores and closing stores. when will you get to the point where all we've been hearing, all we hear about is opening a number of stores and then being able to be a national advertiser so when i'm watching football i'll see an ad for popeye's? >> you know, we are increasingly a national advertiser adding flights each year is our sales
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increase. and to your point, we're growing the most free standing units in our category. so this year the net unit growth will be up about 4% which is very respectable. the units that we closed that have moved where the trade area has moved or we've -- leases expired, those units have less than half the average unit volumes of our new units, jim. really the focus is on the new units and they're performing 40% above our system average sales. >> now i'm seeing popeye's appearing in different kinds of neighborhoods. for a while there i felt it was a little, you were -- previous to you, actually, more down scale. i'm now seeing you in a lot of areas that i regard as being, let's say for lack of a better term, a yuppie area. i see you in young professionals. i see you in burgeoning areas. you really changed the -- who you're selling to. >> we really changed the positioning of the brand by renaming our brand popeye's
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louisiana kitchen. we really made the brand deliver for all kinds of people and all kinds of neighborhoods. plus we're doubling the footprint of our brand across the united states and creating real excitement in new neighborhoods. >> now you're also whether you remodel a store and you're doing that over time, you get dramatically better results, don't you? >> remodeling is a great benefit to sales. and our system by the end of this year will be about one-third remodeled and we expect to have the full system remodeled over a three-year time frame. >> you just now are beginning to get some analysts to roll out coverage. i know when we spoke last you said you're going to start getting more visibility among analysts. yet your chain has a lot better growth than others that they follow. >> well, sometime i think we are a little bit under the radar. we're excited. recently picked up by piper jaffray. i thought they did an excellent assessment of where we are and where we're going. i think we're gradually our story is becoming known. >> you like the idea that you
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talk about something that i only hear otherwise from chipotle, the culture innovation leadership that you have, the servant leadership. i think you should talk about that. it distinguishes you from a lot of what we're seeing in the other quick serve category restaurants. >> you know, the way i think about that is how you do business is more important than what kind of strategies you take. that's how we work at popeye's. our franchisees are our number one customer. we're here to serve them, give them a great profit making business opportunity. and we want to instill the culture of servant leadership that insures we sustain that strong partnership with our owners and the strong results that we delivered for our shareholders over the last several years. >> cheryl, last question. you just did this gigantic 29 restaurants out of bankruptcy in minnesota and california, putting a lot of money in those. is that a new way for you to be able to grow quicker? >> you know, that's a very exciting acquisition. just approved in bankruptcy court last night.
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it will give us a footprint in minneapolis and northern california. we could not be more excited about this growth opportunity. and i think it's just a great example of how intentional and ambitious we are to grow our footprint. >> i think you're doing a terrific job. it's the best performer in the group. thank you so much to the ceo of afc enterprises, better known as popeye's but it is a great stock in a category where you might be looking for one. stay with cramer. >> coming up, you are ready to get charged up? cramer cranks up the voltage and goes electric on an all new hyperactive "lightning round." and later, sour apple? it's the most valuable tech company in the world and its products have changed the course of consumer electronics. so why is this stock taking a dive? and is now the time to get in? cramer has answers. don't miss his take on apple
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coming right up on "mad money."
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all right, cramerica, it all happens tomorrow. our annual veterans day show. invest in america salute to the troops. we have a great lineup. members of the military will be here in the studio and we have a pretty big interview planned. that's what you call a tease. make sure you're watching tomorrow. and now it is time -- it is time for the lightning round on cramer's "mad money". what is that about? rapid fire calls. are you ready? start with the lightning round. randy in new york. randy? >> good evening, mr. cramer. >> yo-yo, what's shaking? >> it's a pleasure to be on your show. jim, i'm a bit concerned. this stock is very volatile in the last week. short term and long term. where do you see generac going? >> my friend herb greenberg was talking about stocks that are parabolic.
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that hit its high. don't pull the trigger on that stock until it's under $30, please. let's go to josh in pennsylvania. josh? >> this is a mannheim central boo-yah to you. >> you know i'm a mannheim backer. did help you guys after that terrible time you had. what's up? >> my stock is cyou. >> yeah. you know, i'm not going to recommend any individual chinese stock. i do like the chinese stock market as a whole. not individual stocks. i'm not going to touch that one. i need to go to mark also in pennsylvania. mark? >> hey. boo-yah to you from wayne, pennsylvania. >> and i like wayne. very beautiful there. how can i help? >> bbl. i understand the government's taking them to court in order to get them to pay taxes on overseas earnings. >> that's right. that is the old pennsylvania power and light. i like it! let's go to pedro in florida. pedro? >> hey, jim.
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stock ticker symbol bys. i've been going to it for a year now. it's pretty good. i don't know what to do with it anymore. >> oh, boy. all right. this is the whole group of real estate investment trusts. i don't recommend them unless they come on the show. they have to come on the show. now, you know, i have been recommending annaly. it is better than this one. but i have to do more work. dean in washington. dean? >> hey, jimbo. sad, sad, losing money every day boo-yah. >> many of us are. >> so hey, last week i dialed in to solutions. they missed the earnings. >> no hurry. now you're in tax law selling season. i don't think you touch that stock until the he end of the year. i need david aldridge to come in and talk about it. and that is the conclusion of the "lightning round." >> "the lightning round" is sponsored by td ameritrade.
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and later, cash infusion? from syringes to surgery, medical supply company henry schein is in the heart of health care. as this sector settles into new reforms, should you make an appointment to buy? tonight cramer is going one-on-one with the ceo to determine a diagnosis after earnings. this is karen and j. they don't know it yet, but they're gonna fall in love, get married, have a couple of kids, [ children laughing ] move to the country, and live a long, happy life together where they almost never fight about money. [ dog barks ] because right after they get married, they'll find some retirement people who are paid on salary, not commission. they'll get straightforward guidance and be able to focus on other things, like each other, which isn't rocket science. it's just common sense. from td ameritrade.
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if you want to know what stocks can work in this increasingly difficult environment, how about we start with stocks that go up when they report earnings, not down, especially on horrendous days of late. stocks like henry schein. it's one of the world's largest distributors of health care products and services. they supply nearly 775,000 customers worldwide. doctors, dentists, veterinarians, laboratories. what i like about this, highly fragmented industry. it is consolidated. henry schein is keeping costs down, something that will be more necessary than ever in a world where we're looking at medicare reimbursement cuts,
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cuts over in europe, too. now yesterday morning they reported a solid quarter with inline results and upside guidance. expectation is more important than the stock. the market was down 300 points. today it gave back all those gains and more. so you're getting the results for free. i think this is the kind of stock that can work in this market. don't take it from me. let's talk to the chairman and ceo of henry schein, a company we have liked for many years to hear what is ahead for the company. welcome to "mad money." >> thank you, jim. >> have a seat. >> how you doing? >> all right. how about you? >> excellent. >> okay. i've always liked your company. i know your company is behind a lot of products we see every time we go to the doctor or the dentist. and i thought before we get into the specifics that you walk us through the best sellers and what -- and these are things that are -- we expect to see. >> yes, absolutely. well, jim, it's good to be here with you. not every product here brings pleasant memories. >> no. >> right. so here we have the hand piece.
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>> the fecal diagnostic. >> that's for the physician. we have the hand piece. you're quite familiar with that? >> yes. >> we sell more drills and repair more drills than any company in the world. then you have -- >> did you have the marathon man one? >> and then we have lidocane, the anesthetic. and we are selling more dental anesthetic than any company in the world. these are basic products. of course, you have the gloves. you've got the -- >> you don't cut back on the painkiller when the economy is bad, do you? >> no. no. >> it's not safe, right? >> absolutely not. what you need here is when the economy is bad and the stock market goes down, extra shot of this, only administered through the dentist but not through the veterinarian. >> then the newer products. everyone knows when we had the flu, although this year the flu
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is not that bad apparently. >> well, it's not that bad also because a lot more of american population are taking the flu vaccine. we have tremendous prevention. having said that, one of the areas that henry schein built our reputation on is the notion of a sepsis control. in the late '80s when this became important and aids started appearing, we came out with handbooks for doctors and dentists explaining how they can add sterilization to their office. that is still the backbone of henry schein. >> whether we think about the runaway health care costs, there are not many companies that do much to help. you do. you cut costs. >> well, our goal is twofold. one is our goal is to insure that procedures take place outside of the hospital. it's much less expensive to take care of a procedure -- firstly to prevent somebody from getting sick, and then when they get sick to treat them in the doctor's office. prevention is very, very important, and of course, our
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care is a way to prevent disease. because, of course, oral care is not only about the drilling and filling, it's about making sure the entire body is holistically treated. so if you take care of your oral care, the quality of life and the overall health care of the human being is improved. >> but i have not -- i'm selling you short. you also have a terrific veterinarian business that is really the best growth engine you've got. >> yeah. of course, you've got the prevention side and the human side. and if you can prevent a disease, you don't have people going to the hospital and the cost is much, much lower of treating somebody in the office, right? that's number one. and a lot of this is driven by baby boomers. the baby boomers understand the importance, they're the most educated generation ever and they understand the importance of prevention. the baby boomers are also driven to buy pets. they can afford pets and they like the companionship. so the three businesses we're in all lend themselves to the economic challenges we have.
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you got the consumer wanting the baby boomers, the consumer wanting more pets. you've got preventative care taking place in the dental office. and also on the medical side moving procedures from the hospital to the physician office. >> i'm wearing this pin which is rise above because the fiscal cliff. i feel your company has something good going for the fiscal cliff, not bad. there are companies that want to sell themselves and get this lower capital gains rate. you are doing -- is there a lot of activity in your space now between now and year end? >> well, the issue -- i can't tell you from whether shareholders this significant gains or going to sell stock or not, i would imagine if they were to do that -- >> if i own a company, i would like to sell my company to you before the capital gains went up. >> right. so, of course, we do about 20 acquisitions a year. our pipeline is full. and there are certain owners in the united states that would like to sell their businesses before the year end that, is true.
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but our acquisition portfolio is on a global basis. there are opportunities at every single market to aggregate the office space, dental, medical, and companion veterinary space. >> your company is in the space that i follow and your space had the least degradation worldwide even though you got fiscal issues everywhere. you have a great growth path. thank you, sir. that is chairman and ceo of henry schein. this is the kind of stock, as all stocks are brought down, you should circle back to. great quarter. secular growth. not a lot of cyclical exposure. henry schein. "mad money " is back after the break. >> sour apple? it's the most valuable tech company in the world. and its products changed the course of consumer electronics. so why is the stock taking a dive? and is now the time to get in? cramer has answers. don't miss his take on apple coming right up on "mad money."
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i'm calling them fcss, fiscal cliff stocks. and they're the names that it makes too much sense to sell simply because tax rates do matter a great deal. what does an fcs stock look like?
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how about apple, to name the worst example. i got stopped on the floor of the new york stock exchange who asked me the most common question in the last month. am i going to lose my shirt in apple, to which i said, depends on the shirt. i wasn't being glib, though. i don't want you greedy. if you're wearing a $50 and your apple basis where you bought the stock, then you're wearing a shirt that has a lot of room. but you're also being terribly greedy. greedy as all get out if you don't take something off the table. you see without something compelling to drive apple share price back higher quickly, you're stuck trying to figure out where it's worth betting that the stock can trade back to $700 and you can make an additional 160 points or whether it pays to take profits now and pay the low 15% capital gains tax. i have enough respect for apple, the institution that it's not that easy to call.
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but my trip to bucknell two weeks ago where i interviewed steve jobs' biographer, it gave me great worry for 2013. he said there is nothing. there is no big wow factor. nothing omg in the product lineup. and itv which many people are pinning next year's growth on needs the cooperation of cable operators to pull off. the cable operators are doing very well. they're powerful. unlike the music companies that steve jobs rolled for itunes. cook's not a bully like jobs. so it's hard to believe the cable companies will give control of the cable box to apple which i think it needs to have itv. that means 2013 may not have products of consequence. however, 2013 will simply have enough in it courtesy of the fiscal cliff's revision in capital gains taxes to make the stock go lower. if the taxes on your gains in apple double next year, it could be much better to sell now than to sell later. now i have a nontaxable account. i still sold a lot of the stock for my charitable trust after
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listening to isaacson. i couldn't act on it immediately because of my trading restrictions. i never pride myself on calling the exact top in the stock. apple was way too big a position versus everything else because of a high quality problem. so we took some off the table. that said, if you think the fiscal cliff is going to be resolved by tax rates not going up that much and apple falls to a level that is just too cheap on a dividends basis which wouldn't be all that far, you may be tempted to hold on for new product we don't know about that's been developed post jobs, tall order. again, i save some stock for action alerts. i feel like something good could happen. if you want to hold on to your apple? you have to write your congress person. she's in charge right now, not apple. and last i looked, i would rather pay uncle sam $1 today than $2 tomorrow. stay with cramer.
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certified. international. and the mailman picks it up. i don't leave the shop anymore. [ male announcer ] get a 4-week trial plus $100 in extras including postage and a digital scale. go to stamps.com/tv and never go to the post office again. ♪ constipated? yeah. mm. some laxatives like dulcolax can cause cramps. but phillips' caplets don't. they have magnesium. for effective relief of occasional constipation. thanks. [ phillips' lady ] live the regular life. phillips'. >> it's not all done in foul weather. after the bell, priceline buys kayak at a very high price. of course, all the other stocks in that sector immediately get clubbed. give me a break.

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